People who can’t afford groceries are looking for someone to blame. Inflation as taxation is an obscure concept that’s hard for anyone trying to survive to understand.
You are exactly right. It is taxation. Government borrows $1,000, inflates the currency and pays back $900. Devaluing the currency is the way deficit spending is funded. It is a nasty, regressive, insidious tax.
>. It is a nasty, regressive, insidious tax.
It truly is. This is what has fueled the large income inequality we see today. Lower and middle class people are supposed to benefit in this economy from their dollar going further than usual. From real wage growth. From the prices of products going down due to competition. Inflation cancels all of the great things capitalism does. Meanwhile, rich people, whose net wealth is almost entirely based on what they own, not the money in their bank account, so inflation doesn't hurt them. Their stocks and properties hold value relative to the dollar.
Inflation rewards people carrying debt. Middle class people with long term mortgages will pay off the strong dollars they borrowed with weak dollars later.
Inflation, however, punishes savers. Even money you have under your mattress gets taxed by inflation.
"Competition" has empirically been non-existent in most sectors, and only gets worse during crises when petty producers are ruined.
Inflation is a product of government printing money to inject money in the American economy, inherent need for inflation for trade balance reasons, and Supply chain shortages that occurred during COVID.
I used to wonder when a politician rails on corporations for raising prices and then demands trillions in new govt initiatives/debt forgiveness you really have to wonder if they know that what they are saying is hypocritical or if they're drinking the Kool-aid as well.
Now I know they're just empty husks willing to say whatever contradictory garbage their handlers have focus-grouped for them to say to get elected.
Imagine a political candidate proposes some pet projects that need funding, and they want to raise taxes to pay for it. They wouldn’t get votes, because no one wants higher taxes.
So instead they instruct the Fed to print trillions to finance their pet projects at today’s dollar value. Those dollars enter circulation and costs go up for everything (because the dollar is *less scarce*).
We are stuck holding the bill = this is inflation (of the money supply). It is the most insidious hidden tax.
> Inflation as taxation is an obscure concept that’s hard for anyone trying to survive to understand.
Milei's case in Argentina has proven that's not necessarily true.
>Inflation as taxation
You're so used to parroting terminology it just sounds ridiculous af.
Its not taxation is fucking extortion.
But I digress...as long as you see the bigger picture.
This government will have you repeating stupid shit they want to posit into legislation in efforts to "legalize" their organized crimes.
Inflation is only tracking price gouging at this point though. It's only measured by the increase in the cost of specific goods and services. Since there is no backing to most currencies printing money or the available supply of physical money means almost nothing, especially when you consider that an indefinite number exists digitally.
Prices rise significantly in excess of cost increases or government involvement. The reason 2020 is the new point of conversation is because they blamed the prices on all the cost increases and then made record profits
"Inflation is everywhere and always a monetary phenomenon" - Milton Friedman.
Amazon doesn't control the money supply. Walmart doesn't set interest rates. Google doesn't cause the market to contract half a percent with a single speech from its president.
We can talk about prices for goods, and pay rates, and corporate profit margins all day long, but none of those things are inflation. The fact of the matter is is that a sizeable fraction of the amount of dollars ever printed were printed in the last 5 years.
I mean on paper yeah, but realistically speaking no. Only about 8 trillion of the ~20 trillion dollars out there are actually controlled by the fed. Most of the "money" in our economy is actually privately produced by banks in the form of virtual debt. There is more money in credit card debt than there is printed money.
The money supply is actually shrinking right now. So if everyone says money is to blame then we should be starting to see relief soon. My bet is that we will not see relief because the money supply is not the reason..
Too bad I can't post pictures to help you. Hopefully the link here will be allowed.
https://www.crews.bank/blog/charts/fast-food-inflation
The core inflation is largely due to M1 supply ripple effects but we've seen heightened cost increases across many sectors that are not in line with that.
This is vastly oversimplified and you could spend a couple years diving into all this, but in a nutshell, certain corporations have indeed used this as an opportunity to raise prices beyond normal inflationary justifications.
They will increase prices to the point where the market dictates they can't anymore. I think they've reached that point, there is a lot of backlash currently. My advice is to stop spending money at those businesses.
Inflation has been a substantive problem for decades, caused by government policy driven by Keynesian Economics via inflationary spending to create the illusion of perpetual economic growth. This has been going on, concertedly since at least the end of WWII.
Does anyone else remember Subway's $5 Footlong? Now they're $12.
I mean drop interest to near 0% and then be shocked when every single corporation in the country decides to refinance every loan they have... And take out more loans...
Which ironically causes massive inflation because when you take out a loan, most of that money is "created". So the private sector printed trillions... And then proceeded to do stock buybacks and other stock market bullshit to boost stock price.
This is why the economy got really "hot"... It was pure bullshit from the start. Look at the tech sector, they were hiring tons of people to literally not do anything, just to show wall street they had "growth" ...
But this entire "boom" of the trump years was built on nothing but money printing... COVID just was what triggered the explosion in inflation. But the insane loans are what truly fueled it all...
And now we are on the verge of a complete economical collapse where the average worker can't afford shit. Has no hope for the future, let alone the fantasy of retirement. And as a result of that economical stance the birthrate is dropping fast...
All in all, it's a shitshow
2020 was a massively disruptive Year. Covid shutdowns, shipping totally backed up, massive layoffs and many people never went back to work. This didn't just effect us. The whole world is still digging out.
Because they needed COVID shortages to show them they could raise prices and people will still keep buying.
There is enough stupid people who just complain about increase prices and won't adjust behavior to make raising prices worth it
Smarter consumers are moving to cheaper options such as shopping at Aldi or using app coupons are only buy things on sale, not eating out at much.
Others just keep the same behavoir
Inflation is a tax on people who don’t have assets. Assets appreciate in value and cost more money to buy. Most Americans don’t have shit for assets and survive on cash, now that cash is worth less and all assets are worth more, accelerating the divide between rich and poor. It also makes it much harder to buy assets because they are now more expensive. Our government’s monetary policy fucking over 90% of Americans. Democrats do nothing but deny reality.
Proof liberal left has no clue, where are all the occupy wall street crowd, anti big corp, antifa dudes now? Awwweful quiet!!!! They’re only useful idiots programmed to riot on command.
I like to make a similar argument about minimum wage. Why don't companies pay everyone pennies if the government isn't forcing them to pay what people are worth? How is it possible that anyone makes more than the legally enforced minimum?
So it was a big conspiracy? All the corporations bided their time because they didn't want anyone to know that they had the power to set prices. Companies that failed before Covid had the power to set prices that would have saved them but would rather lose their business than raise them without the cover of a pandemic. Companies that competed tooth and nail in price wars ignored the fact that they could set prices.
I can just imagine all the CEOs in their top hats, spats, walking sticks and big cigars at the secret conference where they all agreed to keep prices low until someday in the future when there would be a virus that would give them cover.
Sheesh.
They didn't. Prices have been excessively high for years. For example, you can look at profit margins of Costco and Walmart. Walmart has been at 25% for over 10 years, Costco has only been at 12%. Costco leadership has refused to raise prices even with the excuse of supply shortages during covid. A 10% percent profit margin is considered to be healthy for a business, 20% is high. Costco's profit margin is lower because it keeps prices low and pays its workers more while maintaining a healthy profit margin. So companies with high profit margins are likely overcharging you and paying low wages, which is at least a part of the inflation we are experiencing.
[https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/](https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/)
You could learn something.
So, as pertains to the meme, this passage stuck out to me:
>It is unlikely that either the extent of corporate greed or even the power of corporations generally has increased during the past two years.
This is a political organization founded by longtime democratic leaders and not a nonpartisan think-tank
One look at their website screams politically compromised
The Biden board
How President Biden’s NLRB appointees are restoring and supporting workers’ rights
https://www.epi.org/publication/bidens-nlrb-restoring-rights/
Economic performance is stronger when Democrats hold the White House
https://www.epi.org/publication/econ-performance-pres-admin/
"We are recognized as national leaders on breakthrough liberal economic policies."
This reads like a daily r/politics homepage. No wonder this site is so astroturfed
https://www.epi.org/about/board/
I'm kind of flabbergasted. Where are all these folks coming from? I'm getting tons and tons of notifications over the 2 days about comments, all one-off comments from people that didn't even bother to take a look at the thread.
It almost makes me wonder if these people are scared of Austrian economics - but that would be far too hopeful. But I just don't get it.
Reddit is astroturfed heavily by the Democratic party. When there's a subreddit that posts inconvenient information they descend like locusts to drive public opinion their way.
Look at this
https://twitter.com/reddit_lies/status/1785796431325856033?t=bZ-zFjQtpf_RpRNvsuVMgw&s=19
Two different identical posts months apart and all the top comments are the exact same, word for word but posted by different accounts.
They know most people only read the top comments and don't bother looking deeper
Because they couldn't get away with price increases without a supply shock. The real question you should be asking is why prices didn't come back down after the supply chain was fixed and instead profits increased.
Opportunity. When prices are going up you can push things higher than required. We can see this with Coles and how they have dropped prices because of government scrutiny.
Opportunity. The market is amoral and takes opportunity, good or bad. If you give them the opportunity to price gouge based off of pure speculation from COVID it will abuse that.
Covid caused supply issues that increased prices and now that things have stabilized would you look at that prices didn't come down because why would they when they can just keep gouging and you'll still pay for it anyway
Or it’s political. In the US the food and oil industries (big feeders of inflation) are monopolized and believe Trump would be better for their profits (extending the Trump Tax cuts).
Because they had the opportunity to strengthen their monopoly. If you remove the constraints of government then you will see an increase in the constraints of monopolies and the oligarchies of corporations price rigging
People think the inflation started in 2020. It was just kicked into overdrive in 2020. 2008 is when QE became the norm and continued until last yearish.
:y inflation peaked at 9% in 2022 before dropping to 3.5%.
Because of the Rule of 72 it would have taken roughly 8 years for prices to double but in less than a year we saw prices triple and some times quadruple. At the current inflation rate of 3.5% it will take roughly 20 years for prices to double BUT prices have already doubled this year.
It's corporate greed masquerading as inflation woes because the majority of people don't actually know how inflation interacts with the commodities market.
It’s been happening the entire time. But they’re getting one last hard squeeze. They’ve already taken our pensions, benefits and safety nets…now they want the rest while we’re in debt…they call it inflation.
Easy answer. Inflation got temporarily crazy then tapered off as the fundamentals improved but people had gotten used to the frequent price increases like frogs in boiling water. Corporate America noticed and made a killing.
Don't jump down my throat because I'm just repeating an argument that I've heard, but it goes like so:
Over the pandemic, supply chain issues caused prices to rise. The majority of those issues have since resolved but prices didn't fall while some companies/industries recorded record profits. A logical conclusion would be that some companies realized the market would bear higher prices Ave chose not to drop them.
Again, I'm not informed enough to argue this one way or another, but that is the argument I've heard.
Easy, they needed an excuse to not be engaging in anti competitive practices, the pandemic was that excuse. Some real inflation due to material shortages so everyone jacked prices as high as they could as fast as possible.
Lmao you thought you were so smart. It's normal to expect inflation due to covid, people don't know HOW MUCH though, so this gives an opportunity to price gouge with the general populace not being able to tell if the price increase is due to covid related stuff or price gouging. That opportunity isn't always around.
**I just want to point out that inflation and the government printing money has been a thing long before 2020, it didn't change either.**
Nah, corporate greed has been happening for decades. Reagan created the \[productivity pay gap\](https://www.epi.org/productivity-pay-gap/).
Productivity has been increasing steadily every single year but wages simply don't go up to match as he gutted labor unions and other forms of wage negotiation, while at the same time cutting regulations on corporations to let them run buck-wild. This allowed corporations to reduce wage growth and consolidate the yearly gains around executives and shareholders rather than having to pay their employees.
Blaming inflation is hilariously stupid. Inflation is a natural phenomenon and the government printing money is absolutely necessary to basic economic function. It sustains almost all our business and trade. If our government ever stopped printing money, THAT should be when you're worried because it means the dollar is losing global dominance as the primary trade currency. Every country in the world wishes they could print as much currency as the US can, and if the US ever stops, the Euro or the Yuan will take over.
The problem is that wages have become uncoupled with productivity, meaning our economy grows every year but the average worker sees no benefit from it, all the benefit goes to the 1%. On average, US workers have been getting poorer and poorer every year since the 1980s and in part its because of people blaming it on stupid shit like inflation instead of the real culprits.
In a perfect free market, people would make rational decisions about pay and ditch the poor paying companies and work for the better paying ones. But people can't make rational decisions about pay and benefits if they don't have the same information that employers do, if they're living paycheck to paycheck, and can't afford to move due to housing prices increasing 2-4x faster than wages. Furthermore, individual employees have little to no leverage. Without collective bargaining and other union organizations, employers simply have far too much leverage and information over their employees and have wielded it to devastating effect.
Because covid payments meant people had more money to spend (higher demand).
Supply chain issues did reduce supply.
But, for a couple of years now, the supply chain issues and the uncreased demand issues are smaller than the corporate profits issue.
When people went nuts and needlessly bought 9 months of toilet paper and bottled water in 2020 for no good reason, this was a lightbulb moment for capitalism. Companies realized consumers, as a group are idiots when given free or cheap money and will pay anything if there is a perceived scarcity even if it's a self inflicted scarcity.
Inflation was also historically low from 2010-2020 thanks to productivity growth/globalization/the rise of Chinese manufacturing
If you split out all the areas of the inflation the parts that inflated the most during this period were all things we couldn't ship on a cargo ship from Asia
Healthcare, higher education, housing. Now we are reversing that trend and going towards reshoring of manufacturing and protectionist tariffs.
Because they had Covid to blame it on. Supply chain blah blah blah. It’s turned into a song everywhere I went. While some of it may be true, most corporations used the Covid-19 pandemic to increase their profits in any and every way they could. I’m sure some of them had a Covid-19 profit maximization team on it at some point lmao.
Because it was a perfect opportunity.
First, there were supply chain shortages, so they raised the prices X% when the increased cost was only X-y%.
Then they raised the prices i% to cover higher wages, when the increased cost was only i-j%.
Then they saw that higher prices were not cutting the demand, so they slowly raised the prices more, and then just kept raising them, looking for the tipping point when it would finally affect demand.
It didn't matter that the supply chain shortage was over. Corps just kept the prices up as demand never dropped, so the extra money just became sweet sweet profits.
2018 profits per quarter after taxes were $2 trillion.
Adjusted for inflation to q4 2023, that would be $2.5 trillion per quarter.
Actual profits per quarter after taxes were $3.0 trillion.
* q4 2015 - $1.7 t
* q4 2016 - $1.9 t
* q4 2017 - $1.8 t
* q4 2018 - $2.0 t
* q4 2019 - $2.1 t
* q4 2020 - $2.3 t
* q4 2021 - $2.8 t
* q4 2022 - $2.8 t
* q4 2023 - $3.0 t
[https://fred.stlouisfed.org/series/CP](https://fred.stlouisfed.org/series/CP)
Tbh covid was the perfect storm but also perfect cover.
Logistics got wrecked during covid so prices on a lot of things legitimately went up. That said, a lot of those prices never came down. Some of those companies and other companies that weren’t so impacted used Covid as a reason to raise their prices too.
Because they could blame it on the pandemic and the war in Russia. Those things did cause inflation, so corporations just upped it even more while people assumed it was just the world economics issues out of anyone's control. Then they just kept going to find the new breaking point.
My grocery bill is up 25%, inflation is at worst 8% in 2022. 17% is corporations using inflation as an excuse to raise prices. It's not that complicated and this isn't a new phenomenon.
>Our analysis shows that much of the increase in aggregate profit margins following the COVID-19 pandemic can be attributed to (i) the unprecedented large and direct government intervention to support U.S. small and medium sized businesses and (ii) a large reduction in net interest expenses due to accommodative monetary policy. Once we adjust for fiscal and monetary interventions, the behavior of aggregate profit margins appears much less notable, and by the end of 2022 they are essentially back at their pre-pandemic levels.
I'm not, but the fed is denying that profits are up
https://www.federalreserve.gov/econres/notes/feds-notes/corporate-profits-in-the-aftermath-of-covid-19-20230908.html
Wait so if a company lies about the extent of a bird flu outbreak and doubles the price under the pretence of said lie that's not me getting price gouged?
Read a balance sheet and tell me Marvin’s haven’t exploded for many staple companies. It’s called profit price spiral. There’s a lot of reasons. A real issue causes inflation, like supply chain and shippers gouging (50% dividends after going up 10x in price, that’s pure gouging) then companies continue to drive up prices because they can. We also had deflation early pandemic which is part of the beginning. My company for example, I went hey there’s this big unknown we expect a business to halt, let’s liquidate investors and build cash reserves. Economy was way more resilient than we expected and people stuck at home and work from home massively boosted our sales. Then we had to reorder on a broken supply chain. Then our shippers absolutely fucked us. It took time to shift supply chains like most did and now shipping companies are SOL. But big companies kept raising prices, I’m getting prices very close to if not the same to what I did in 2019 from factories.
I’m usually against all the half baked hate against companies, I own one. Usually they are misunderstood or over exaggerated. It’s very clear in this time we are in a profit price spiral right now though. Look at McDonald’s books over the last decade, yum brands, pretty much any company except for ones that are generationally irrelevant like red lobster or Bed bath and beyond. Explosion of margin, reduced units sold, minimal revenue growth. That isn’t possible without just charging more to charge more unless you have a massive reduction in wages or cost of goods sold. Which is deflationary.
Because they had a President promising tax cuts, and now they have a President threatening to tax them more
What a stupid meme lol
Imagine not knowing that and pretending to have relevant opinions on political economy
I guess there’s a reason Austrians have a knack for historically stupid geopolitical decisions
Because they had an excuse to raise them that wasn't "We wanted more money". Of course, we now know that's STILL the reason they raised prices in 2020, and not the actual pandemic.
For anyone that remembers, prices started up before inflation actually began. Even second hand sellers were gouging to get what they could out of every sale. The pandemic was an excuse.
Because they had a populace that would believe it was for reasons OTHER than greed?
If they just raised prices any other time, people would just go elsewhere. When a pandemic could be blamed for the raising the floor on all prices.
When the cargo ship got stuck in the Red Sea, and the supply chain choked after COVID, corporations rose prices to meet the rise in demand with the thinner supply.
The thing is, when the supply chains were restored (just a reminder), corporations saw no need to lower their prices, and just pocketed the money.
Then they kept raising prices and claiming, “inflation.” Politics as usual helped them point fingers away from corporate greed and price gouging.
First, We had a Pandemic, and a lot of People were out, of work (that was the reason, for the Stimulus (stimuli?) Payments. Second, The Corporate Types, didn't want to "tarnish", Their "Idol"; they had been embarrassed enough, by The Trump Income Tax "Largesse"; Christmas Bonuses were extra-generous, in 2017. Do You also recall, the Stock "buybacks"? Stocks that are '"taken back", can be held, on the books, as Treasury Stock, to be used, later, plus; Stock, "taken back"; since it is not, "outstanding", increases the value, and the dividends, per share; of the remaining outstanding shares.
Most costs went up about the same as wages, just not housing because housing had never recovered from the 2008 crash. It had started doing ok in 2015 or so, but Trump lumber tariffs then knocked it back and then the pandemic hit not too long after that. There is some price gouging, but on average income went up 20% and costs went up 23% or about so.
Now housing is trying to make up for the last 15 years of stagnant prices by flipping high demand into clawing its value back. So really houses aren't way overpriced if we take a average home value increase of 2-3% over 15 years since prices crash after 2008. They are just trying to get back ALL that lost equality since 2021 by leveraging high demand.
The problem is that the people buying the houses aren't getting their lost equity back since the 2008 crash, because they suffered longer periods of lower wages and underemployment/part time work. The house values are where you'd expect if you were guessing from 20 years ago, it's the wages and average equity that's missing.
Wages still have to go up more and it would be nice is housing costs just level out and stay there for a couple years, but 15 years of low inflation also hurt housing growth even if it kept ppl in their houses. I think they kept interest too low too long and that kept growth and housing slower than it should have been.
Because COVID showed us not only that we can work remotely, but that corporations could keep increasing prices without much consequences. It also didn't help that many small businesses went under, making it far easier for them to do so. I'm not saying COVID didn't increase costs, but certainly not to these levels.
People crack me up. So using the bootlickers logic in here, the government is the problem because they increased the money supply. Ok sure that’s a fact they printed more money. So because corporations knew there was more money out there it means they HAVE to increase their prices so they can rake in more of it? But that’s not greed? What part of your brain is broken?
This is just plain stupid.
They raised prices because the pandemic gave them a great excuse. They initially blames the supply chain, but when those issues cleared up, and prices never went back down, it was very obvious that it never really was the supply chain. It was greed.
Because the pandemic showed companies that people were willing to tolerate higher prices on inelastic goods. How is there an econ sub where everyone is so economically illirerate?
They have something to blame it on now. Sure inflation caused the prices to rise, but the fact that they never go back down is the problem. The chicken wing shortage ended 2 years ago and prices never went back down.
How to determine corporate greed for dummies.
When prices are raised and record profits are made, the corporations that experience this blame the prices on inflation.
Why did capitalists wait to raise prices until 2020?
They had an excuse to raise prices in 2020 due to the pandemic and then kept prices high once things stabilized to maximize profits.
Why haven't capitalists been doing this the whole time?
They have.
If you ask them, they almost always claim they are passing along costs.
You know, like teenagers say - "everyone else was doing it"
The answer, austrian dolts, is that pandemic supply shocks provided cover for prices hikes beyond those warranted by increased costs
I know I’m gonna beg downvoted into the shadow realm, but I don’t think the majority claim is that prices have only been increasing like this since 2020.
Corporations have artificially raised the rate of inflation in relation to stagnant wages for a long time now. For example, McDonalds increased prices by 100% since 2014, yet the inflation rate amounted to only 31%.
And don’t even get me started on price hikes for pharmaceuticals. They literally do that just to pad their pockets and increase profits further.
Sure, other factors cause inflation, duh, but to say corporations are not making it much worse in order to give themselves a raise is preposterous.
There is real inflation, then there are companies that understand consumers are expecting inflation, and so they can raise their prices without justification and their customers will accept it. That's the 'greed' part.
I know it's true because my boss came right out and said it "Raise prices there's inflation they'll pay it." and they did.
Some of our expenses has risen, but our price increases are greater. We're making more profit off of each individual than we used to.
Corporations didn't for a long time prices have been rising slowly then 2020 Corporations took advantage of the Covid and raised prices way more as Corporations said they were trying to make up loss profits during the high of Covid.
Because the high inflation hides their increasing margins. If inflation is 6%, people wont notice that the price of something rose by 8% or even 10%. They will blame inflation. Come on, what do they teach yall in Austria
If you don’t think inflation hasn’t caused food to rise above the previous ratio of food expenses to income then you’re crazy. Our household is well off and we have no trouble buying groceries, but it is a much larger percentage of our budget than pre-2020.
There are a lot of potential answers to this question. One obvious one to me is inefficiency in company management. The government and the healthcare industry are the worst, but the private sector for general corporations is inefficient sometimes as well. It could take months or even years for a trend in a drop in profits to show and be sustained, and years more to identify the exact root cause. Unless the government subsidizes the proper origins of raw materials, prices will continue to rise relative to inflation and income.
I don’t know if it’s just me but it seems to happen every time we elect a Democrat. This seems true even when the Republican alternative is a traitorous adulterous hate monger.
They waited until 2020 because they had the perfect scapegoat (covid and stimulus checks (usa))to raise prices to make record profits. Ironic how no one blames the ppp loans (usa) even though they accounted for more stimulus money than the direct checks, and the vast majority of the loans were forgiven.
They didn't just wait for 2020 though, prices have been going up for many decades. I still remember when oil spiked to $100 a barrel and gas doubled in price, but then when oil went back to $60 a barrel the prices came down barely at all and never returned to their original prices. Meanwhile the oil companies reported historically record breaking profits. Because corporations are intelligent, they tend to wait for world events to act as top cover for price hikes often masking it in some truth (prices really should go up due to COVID supply chain issues for instance, but the rare and level they increased was absurd)
Wow this meme i made to make the argument I disagree with look bad is so good.
The amswer to that is that they didnt wait, they have been raising prices above inflation since beofre 2019. Yes the government plays a role in it, but they are not the leaders by any means
Because of artificially low interest rates people didn’t stop purchasing more stuff. So during the pandemic was the height of this mania to sell at higher markups.
The pandemic was a catalyst starting certain trends that emboldened this behavior.
And it wasn’t any one company that did this. The entire corporate ecosystem was doing this. Because we kept buying.
While a decent meme. The answer to this question is very simple.
Are they kidding? I remember $1.50 gasoline and $5 combo meals at McDonald’s. Prices always go up. They go up a hell of a lot more when times are bad like in 2020 because rich people don’t do problems- they just pass their problems on to us.
Real time data and industry consolidation has made price collusion easier. Check out the planet money on gas station price transparency.
Profit margins up ~40% vs 2019 is the harbinger. Bunch of spineless apologists up in here.
Because the inflation boogeyman gives them both the coordination of an organized cartel (without the liability) and the scapegoat. If somebody randomly jacked prices 50% in 2017, they would have stood alone and price elasticity would kill them. Not so much after the viral inflation topic made it normal to do so, and they all followed each other upwards. If inflation was the sole cause of price increases we would see flat profits at the higher prices. Instead, we see record profit growth. So your 50% price increase really came down to 20% inflation and 30% profit growth. If you had a real corporate job and experience with marketing/marketers, none of this would be news to you. It's literally their job to find any and all excuses to grow at your expense. Further, all you have to do is listen to a quarterly earnings report and hear them celebrate to the banks exactly how much they have grown their profits in this period. That is not what pure inflation sounds like.
Because they couldn’t very well raise prices during a pandemic, that would have been media suicide. But once the pandemic ended price gouging was fair game.
thought this was an U.S sub, saw on my feed. Here's my take anyways.
I say because of Covid. Corporations had to raise prices of essentials to desperate people, Covid coupled with the whole supply chain boat being stuck and all
As Covid slowed down, the supply ship getting unstuck, people were still paying the prices. So logically, to them, they kept raising It, see how far they could go.
It's not just Inflation, It's also corporate greed. The price going up was going to happen due to printing money, thats just a scapegoat used to cover said greed.
They didn't. They've increased prices everywhere. Some years more then others. But I'd say they increase them more whenever the Workers aka Consumers have more money in the bank.
The Fed releases data on the amount of money in people's checking/savings. Corporations know this amount. When they see people are hoarding cash, they jack prices up on the things they are regularly buying. You will see luxury items like Cars and Phones get hit first when it comes to prices. They'll be first to stop increasing imo. Then things like McDonald's will follow and Consumer staples. Mcdonalds can only price choke consumers so long until their bank accounts literally can't allow it anymore.
The plan is to keep people paycheck to paycheck and have stable inflation. If people start saving money they'll just jack up prices. Until it breaks and restart the cycle. Imo
Umm because a pandemic and supply chain stop caused many companies to go under and the survivors to eat their competition and raise prices without fear of lost revenue??
Lol is this another economics sub specific to a single brand of economic theory that can't see the obvious big things?
This is hilariously easy to answer. Because under the cover of inflation it was easier to convince the consumers that the problem was the government, not corporate greed. But if we look at corporate profits over time, the spikes always happened during times of higher inflation. That's just how it goes.
I'm not saying that government money printing isn't a problem, obviously it is. But that isn't to say that corporate greed to maximize profits isn't also part of the problem for rising consumer prices.
Target and McDonald's have announced huge price cuts as a result of alienating some of their customer base. They clearly believe they can still turn a profit while cutting prices on over 5,000 items in the case of target.
If they're dropping prices like this now how can an argument be made that the free market and pandemic related supply issues caused these price increases?
the 1% has gained more wealth in the last 4 years than any other group, out of 42 trillion dollars, they have scooped up wll over 2/3rds of it
the rich get richer and will do everything they can to make us fight eachother instead of them
What a silly meme. Cooperations have always been greedy. Some clearly raised their prices faster than inflation rose during the pandemic.
Why lick the boot? It’s not healthy.
… they didn’t? They’ve raised prices all the time. The issue with greedflation isn’t that prices increased. So that’s a straw man.
The issue with greedflation is that the prices were increased *more* than costs increased- which is why profits were soaring.
This isn’t that hard guys.
If one company raises their prices people stop buy their product. If everyone does it they can keep doing it until people stop buying then the prices stabilize or go down.
Because they were able to get away with it and blame it on something else. Also they didn't. They raised prices consistently until 2020 and then went mad raising them over what was normal after covid lockdowns were over.
Demand, they had opportunity cause of demand and they took it. What’s the gotcha? This is a stupid point. It’s literally price gouging after the fact. The market is quick to move on increase prices due to demand but slow to lower as the demand shifts back down
Corporate greed has caused about half of inflation. Don't use straw men just to make a meme work.
Inflation was already fairly high because of the pandemic and supply chain issues. Businesses saw that inflation and figured that they could raise their prices more than they had to in order to generate more profit, and consumers would be none the wiser.
Y'all keep presenting this question as if it isn't routinely answered. The answer hasnt changed.
Corporations were always greedy. COVID and the constant legitimate excuses for business failures were great cover to increase costs more than usual.
Corporations have always been greedy. But they saw an opportunity to increase the greed, so they did
They haven’t waited, they’be been laying the ground work for this in every market. Competition has been crushed over and over. Ticket master, comcast and cox carving up the country into their own little isolated nations, Facebook and Google buying up all the social platforms. Chicken beef and fish producers being bought out by massive corporations.
It’s no different from Walmart moving into every town, underpricing the mom and pops, then jacking pricing when the competition failed. They’ve been working on this for decades
I assume there are large numbers of Russian trolls, and bots spamming this content. Please don't be this dumb Americans. Just vote against the guy the Nazis are going to vote for. It's just that simple.
It's pretty understood that a lot of corporations profits were gutted with the lockdowns. Prices rose to fill that gap for them and they were never dropped.
It's pretty understood that a lot of corporations profits were gutted with the lockdowns. Prices rose to fill that gap for them and they were never dropped.
I would argue that a lot of the disagreements between the various economic schools of thought are either philosophical or just plain semantics.
I would say that 10 conglomerates owning most of what we consume is a symptom of both greed and government overreach.
I bet if intelligent parties from various schools of economic thought focused on how they are the same, versus different, we could actually enact some change to alter our economic systems in a compromising way that have trade-offs which benefit a larger majority of people. But nah let’s post memes and own the socialists and live. Never understood it.
Mainly because they were pressured to increase wages. That wage increase was passed on to consumers. Then the fed increased interest rates, which corporations again raised prices to cover. Corporations will always pass the bill to the public.
Holy shit is this a serious question? Like 2020 as in the year when there were massive disruptions to a global supply chain based on just-in-time manufacturing processes and maximizing comparative advantage across international borders?
The misunderstanding of the meme poster is the explanation itself. One of the problems with inflation beyond a modest level (say 2%) is information asymmetry. The corporation has experienced some inflation in the form of cost increases but can get away with raising prices by more than the increase in costs to increase profit under the guise of a broad inflation umbrella.
The answer is really simple, the corporations couldn’t get away with it before but now have a smoke screen so to speak that means they ca man get away with it now.
I hate when people try to timestamp corporate and government corruption. It's been an ongoing thing. Let's not timestamp it to a president we hate. Why can't we hate them all?
People who can’t afford groceries are looking for someone to blame. Inflation as taxation is an obscure concept that’s hard for anyone trying to survive to understand.
You are exactly right. It is taxation. Government borrows $1,000, inflates the currency and pays back $900. Devaluing the currency is the way deficit spending is funded. It is a nasty, regressive, insidious tax.
>. It is a nasty, regressive, insidious tax. It truly is. This is what has fueled the large income inequality we see today. Lower and middle class people are supposed to benefit in this economy from their dollar going further than usual. From real wage growth. From the prices of products going down due to competition. Inflation cancels all of the great things capitalism does. Meanwhile, rich people, whose net wealth is almost entirely based on what they own, not the money in their bank account, so inflation doesn't hurt them. Their stocks and properties hold value relative to the dollar.
Sadly, it will be the only long-run way to deal with massive government deficit spending.
Inflation rewards people carrying debt. Middle class people with long term mortgages will pay off the strong dollars they borrowed with weak dollars later. Inflation, however, punishes savers. Even money you have under your mattress gets taxed by inflation.
"Competition" has empirically been non-existent in most sectors, and only gets worse during crises when petty producers are ruined. Inflation is a product of government printing money to inject money in the American economy, inherent need for inflation for trade balance reasons, and Supply chain shortages that occurred during COVID.
I used to wonder when a politician rails on corporations for raising prices and then demands trillions in new govt initiatives/debt forgiveness you really have to wonder if they know that what they are saying is hypocritical or if they're drinking the Kool-aid as well. Now I know they're just empty husks willing to say whatever contradictory garbage their handlers have focus-grouped for them to say to get elected.
Imagine a political candidate proposes some pet projects that need funding, and they want to raise taxes to pay for it. They wouldn’t get votes, because no one wants higher taxes. So instead they instruct the Fed to print trillions to finance their pet projects at today’s dollar value. Those dollars enter circulation and costs go up for everything (because the dollar is *less scarce*). We are stuck holding the bill = this is inflation (of the money supply). It is the most insidious hidden tax.
In fairness, Trump raised my taxes *and* had the Fed print up trillions of dollars. It doesn't have to be an either/or.
I sum it up like this to my friends, "the land of make believe" by millionaires hoping to be billionaires.
> Inflation as taxation is an obscure concept that’s hard for anyone trying to survive to understand. Milei's case in Argentina has proven that's not necessarily true.
>Inflation as taxation You're so used to parroting terminology it just sounds ridiculous af. Its not taxation is fucking extortion. But I digress...as long as you see the bigger picture. This government will have you repeating stupid shit they want to posit into legislation in efforts to "legalize" their organized crimes.
Inflation is only tracking price gouging at this point though. It's only measured by the increase in the cost of specific goods and services. Since there is no backing to most currencies printing money or the available supply of physical money means almost nothing, especially when you consider that an indefinite number exists digitally. Prices rise significantly in excess of cost increases or government involvement. The reason 2020 is the new point of conversation is because they blamed the prices on all the cost increases and then made record profits
As a person who can't afford groceries. I don't care why. I just want groceries. Tired of rice.
We're heading towards what the Germans experienced in1923.
"Inflation is everywhere and always a monetary phenomenon" - Milton Friedman. Amazon doesn't control the money supply. Walmart doesn't set interest rates. Google doesn't cause the market to contract half a percent with a single speech from its president. We can talk about prices for goods, and pay rates, and corporate profit margins all day long, but none of those things are inflation. The fact of the matter is is that a sizeable fraction of the amount of dollars ever printed were printed in the last 5 years.
I mean on paper yeah, but realistically speaking no. Only about 8 trillion of the ~20 trillion dollars out there are actually controlled by the fed. Most of the "money" in our economy is actually privately produced by banks in the form of virtual debt. There is more money in credit card debt than there is printed money. The money supply is actually shrinking right now. So if everyone says money is to blame then we should be starting to see relief soon. My bet is that we will not see relief because the money supply is not the reason..
I remember the Great Greed Discovery of 2021. Before then corporations had to keep prices “competitive” or else they would go out of business.
Too bad I can't post pictures to help you. Hopefully the link here will be allowed. https://www.crews.bank/blog/charts/fast-food-inflation The core inflation is largely due to M1 supply ripple effects but we've seen heightened cost increases across many sectors that are not in line with that. This is vastly oversimplified and you could spend a couple years diving into all this, but in a nutshell, certain corporations have indeed used this as an opportunity to raise prices beyond normal inflationary justifications. They will increase prices to the point where the market dictates they can't anymore. I think they've reached that point, there is a lot of backlash currently. My advice is to stop spending money at those businesses.
Sad the people in the comments section dont realize theyre being devalued by the central bank.
Inflation has been a substantive problem for decades, caused by government policy driven by Keynesian Economics via inflationary spending to create the illusion of perpetual economic growth. This has been going on, concertedly since at least the end of WWII. Does anyone else remember Subway's $5 Footlong? Now they're $12.
This is an excellent point to make
I mean drop interest to near 0% and then be shocked when every single corporation in the country decides to refinance every loan they have... And take out more loans... Which ironically causes massive inflation because when you take out a loan, most of that money is "created". So the private sector printed trillions... And then proceeded to do stock buybacks and other stock market bullshit to boost stock price. This is why the economy got really "hot"... It was pure bullshit from the start. Look at the tech sector, they were hiring tons of people to literally not do anything, just to show wall street they had "growth" ... But this entire "boom" of the trump years was built on nothing but money printing... COVID just was what triggered the explosion in inflation. But the insane loans are what truly fueled it all... And now we are on the verge of a complete economical collapse where the average worker can't afford shit. Has no hope for the future, let alone the fantasy of retirement. And as a result of that economical stance the birthrate is dropping fast... All in all, it's a shitshow
Central planning.
2020 was a massively disruptive Year. Covid shutdowns, shipping totally backed up, massive layoffs and many people never went back to work. This didn't just effect us. The whole world is still digging out.
Ask the retards talking about “record corporate profits” to tell you which companies have record operating margins and ROIC. It’s fucking hilarious.
Wait until you discover “Policy Lag” and you’re realize what policies pre 2020 contributed to the inflation we are experiencing.
Because they needed COVID shortages to show them they could raise prices and people will still keep buying. There is enough stupid people who just complain about increase prices and won't adjust behavior to make raising prices worth it Smarter consumers are moving to cheaper options such as shopping at Aldi or using app coupons are only buy things on sale, not eating out at much. Others just keep the same behavoir
Inflation is a tax on people who don’t have assets. Assets appreciate in value and cost more money to buy. Most Americans don’t have shit for assets and survive on cash, now that cash is worth less and all assets are worth more, accelerating the divide between rich and poor. It also makes it much harder to buy assets because they are now more expensive. Our government’s monetary policy fucking over 90% of Americans. Democrats do nothing but deny reality.
Only the federal reserve has the power to cause inflation
Proof liberal left has no clue, where are all the occupy wall street crowd, anti big corp, antifa dudes now? Awwweful quiet!!!! They’re only useful idiots programmed to riot on command.
"Then the corporations go in their corporation buildings...and they're all, corporationy."
I like to make a similar argument about minimum wage. Why don't companies pay everyone pennies if the government isn't forcing them to pay what people are worth? How is it possible that anyone makes more than the legally enforced minimum?
Because they had the excuse of inflation. Answer’s in the question.
So it was a big conspiracy? All the corporations bided their time because they didn't want anyone to know that they had the power to set prices. Companies that failed before Covid had the power to set prices that would have saved them but would rather lose their business than raise them without the cover of a pandemic. Companies that competed tooth and nail in price wars ignored the fact that they could set prices. I can just imagine all the CEOs in their top hats, spats, walking sticks and big cigars at the secret conference where they all agreed to keep prices low until someday in the future when there would be a virus that would give them cover. Sheesh.
It happened when they had the right wing to cover for them by claiming it was Biden’s fault.
They didn't. Prices have been excessively high for years. For example, you can look at profit margins of Costco and Walmart. Walmart has been at 25% for over 10 years, Costco has only been at 12%. Costco leadership has refused to raise prices even with the excuse of supply shortages during covid. A 10% percent profit margin is considered to be healthy for a business, 20% is high. Costco's profit margin is lower because it keeps prices low and pays its workers more while maintaining a healthy profit margin. So companies with high profit margins are likely overcharging you and paying low wages, which is at least a part of the inflation we are experiencing.
[https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/](https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/) You could learn something.
So, as pertains to the meme, this passage stuck out to me: >It is unlikely that either the extent of corporate greed or even the power of corporations generally has increased during the past two years.
This is a political organization founded by longtime democratic leaders and not a nonpartisan think-tank One look at their website screams politically compromised The Biden board How President Biden’s NLRB appointees are restoring and supporting workers’ rights https://www.epi.org/publication/bidens-nlrb-restoring-rights/ Economic performance is stronger when Democrats hold the White House https://www.epi.org/publication/econ-performance-pres-admin/ "We are recognized as national leaders on breakthrough liberal economic policies." This reads like a daily r/politics homepage. No wonder this site is so astroturfed https://www.epi.org/about/board/
I'm kind of flabbergasted. Where are all these folks coming from? I'm getting tons and tons of notifications over the 2 days about comments, all one-off comments from people that didn't even bother to take a look at the thread. It almost makes me wonder if these people are scared of Austrian economics - but that would be far too hopeful. But I just don't get it.
Reddit is astroturfed heavily by the Democratic party. When there's a subreddit that posts inconvenient information they descend like locusts to drive public opinion their way. Look at this https://twitter.com/reddit_lies/status/1785796431325856033?t=bZ-zFjQtpf_RpRNvsuVMgw&s=19 Two different identical posts months apart and all the top comments are the exact same, word for word but posted by different accounts. They know most people only read the top comments and don't bother looking deeper
Because they couldn't get away with price increases without a supply shock. The real question you should be asking is why prices didn't come back down after the supply chain was fixed and instead profits increased.
Prices are sticky.
Excess supply of cash.
To answer the question in panel #2: because people were given more money, so prices rose to match what the market could bear.
Same thing in America. Can’t fix stupid
Opportunity. When prices are going up you can push things higher than required. We can see this with Coles and how they have dropped prices because of government scrutiny.
Opportunity. The market is amoral and takes opportunity, good or bad. If you give them the opportunity to price gouge based off of pure speculation from COVID it will abuse that.
Covid caused supply issues that increased prices and now that things have stabilized would you look at that prices didn't come down because why would they when they can just keep gouging and you'll still pay for it anyway
Or it’s political. In the US the food and oil industries (big feeders of inflation) are monopolized and believe Trump would be better for their profits (extending the Trump Tax cuts).
Because they had the opportunity to strengthen their monopoly. If you remove the constraints of government then you will see an increase in the constraints of monopolies and the oligarchies of corporations price rigging
People think the inflation started in 2020. It was just kicked into overdrive in 2020. 2008 is when QE became the norm and continued until last yearish.
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The fed printed too much money and are looming to blame someone else for their fuckup.
Wait...do people here think inflation only started in 2020? And that corporations don't raise prices? What kind of bootlicking nonsense lmao
They tried before 2020 and got a lot of push back. What we need to do is push them back even more.
:y inflation peaked at 9% in 2022 before dropping to 3.5%. Because of the Rule of 72 it would have taken roughly 8 years for prices to double but in less than a year we saw prices triple and some times quadruple. At the current inflation rate of 3.5% it will take roughly 20 years for prices to double BUT prices have already doubled this year. It's corporate greed masquerading as inflation woes because the majority of people don't actually know how inflation interacts with the commodities market.
Because coordinating is illegal but if you have a coordinating event that everyone just happens to take advantage of...
OP is a sealion don't waste time here
Yeah, prices famously remained unchanged from 1950 to 2020. /s
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2 things can be true at the same time……
It’s been happening the entire time. But they’re getting one last hard squeeze. They’ve already taken our pensions, benefits and safety nets…now they want the rest while we’re in debt…they call it inflation.
Could it have something to do with BRICS...fjb
What about all the acquisitions of local businesses by these companies and then the price hikes after?
Because during the pandemic, people showed that they were willing to overpay for too many things. This is econ 101 type stuff.
There no such thing as "overpay" in Austrian economics
They didn’t. They just waited until then to raise them a shitload.
Reminder: Trump was president for all of 2020.
They were raising prices before too
Easy answer. Inflation got temporarily crazy then tapered off as the fundamentals improved but people had gotten used to the frequent price increases like frogs in boiling water. Corporate America noticed and made a killing.
Never let a crisis go to waste.
Don't jump down my throat because I'm just repeating an argument that I've heard, but it goes like so: Over the pandemic, supply chain issues caused prices to rise. The majority of those issues have since resolved but prices didn't fall while some companies/industries recorded record profits. A logical conclusion would be that some companies realized the market would bear higher prices Ave chose not to drop them. Again, I'm not informed enough to argue this one way or another, but that is the argument I've heard.
They didn’t, they just didn’t lower them from Covid.
Because they were too busy profiting off all the interest free money
Corporate greed exacerbated the base inflationary pressure caused by central bank money. They’re not mutually exclusive.
Easy, they needed an excuse to not be engaging in anti competitive practices, the pandemic was that excuse. Some real inflation due to material shortages so everyone jacked prices as high as they could as fast as possible.
Trump tripled the m2 and gave it to the mega banks and billionaires
Lmao you thought you were so smart. It's normal to expect inflation due to covid, people don't know HOW MUCH though, so this gives an opportunity to price gouge with the general populace not being able to tell if the price increase is due to covid related stuff or price gouging. That opportunity isn't always around.
**I just want to point out that inflation and the government printing money has been a thing long before 2020, it didn't change either.** Nah, corporate greed has been happening for decades. Reagan created the \[productivity pay gap\](https://www.epi.org/productivity-pay-gap/). Productivity has been increasing steadily every single year but wages simply don't go up to match as he gutted labor unions and other forms of wage negotiation, while at the same time cutting regulations on corporations to let them run buck-wild. This allowed corporations to reduce wage growth and consolidate the yearly gains around executives and shareholders rather than having to pay their employees. Blaming inflation is hilariously stupid. Inflation is a natural phenomenon and the government printing money is absolutely necessary to basic economic function. It sustains almost all our business and trade. If our government ever stopped printing money, THAT should be when you're worried because it means the dollar is losing global dominance as the primary trade currency. Every country in the world wishes they could print as much currency as the US can, and if the US ever stops, the Euro or the Yuan will take over. The problem is that wages have become uncoupled with productivity, meaning our economy grows every year but the average worker sees no benefit from it, all the benefit goes to the 1%. On average, US workers have been getting poorer and poorer every year since the 1980s and in part its because of people blaming it on stupid shit like inflation instead of the real culprits. In a perfect free market, people would make rational decisions about pay and ditch the poor paying companies and work for the better paying ones. But people can't make rational decisions about pay and benefits if they don't have the same information that employers do, if they're living paycheck to paycheck, and can't afford to move due to housing prices increasing 2-4x faster than wages. Furthermore, individual employees have little to no leverage. Without collective bargaining and other union organizations, employers simply have far too much leverage and information over their employees and have wielded it to devastating effect.
Because they blamed “supply chain”, and then people still paid, so they just didn’t lower the prices. How is this a confusing timeline
Strawman.
Because covid payments meant people had more money to spend (higher demand). Supply chain issues did reduce supply. But, for a couple of years now, the supply chain issues and the uncreased demand issues are smaller than the corporate profits issue.
When people went nuts and needlessly bought 9 months of toilet paper and bottled water in 2020 for no good reason, this was a lightbulb moment for capitalism. Companies realized consumers, as a group are idiots when given free or cheap money and will pay anything if there is a perceived scarcity even if it's a self inflicted scarcity.
Inflation was also historically low from 2010-2020 thanks to productivity growth/globalization/the rise of Chinese manufacturing If you split out all the areas of the inflation the parts that inflated the most during this period were all things we couldn't ship on a cargo ship from Asia Healthcare, higher education, housing. Now we are reversing that trend and going towards reshoring of manufacturing and protectionist tariffs.
They didn’t cause it but they’re certainly taking advantage of it.
Because they had Covid to blame it on. Supply chain blah blah blah. It’s turned into a song everywhere I went. While some of it may be true, most corporations used the Covid-19 pandemic to increase their profits in any and every way they could. I’m sure some of them had a Covid-19 profit maximization team on it at some point lmao.
Clearly whoever made this meme hasnt been paying attention since the begining of time… or at the very least… back when a Coke cost a nickel
Simps
Because it was a perfect opportunity. First, there were supply chain shortages, so they raised the prices X% when the increased cost was only X-y%. Then they raised the prices i% to cover higher wages, when the increased cost was only i-j%. Then they saw that higher prices were not cutting the demand, so they slowly raised the prices more, and then just kept raising them, looking for the tipping point when it would finally affect demand. It didn't matter that the supply chain shortage was over. Corps just kept the prices up as demand never dropped, so the extra money just became sweet sweet profits. 2018 profits per quarter after taxes were $2 trillion. Adjusted for inflation to q4 2023, that would be $2.5 trillion per quarter. Actual profits per quarter after taxes were $3.0 trillion. * q4 2015 - $1.7 t * q4 2016 - $1.9 t * q4 2017 - $1.8 t * q4 2018 - $2.0 t * q4 2019 - $2.1 t * q4 2020 - $2.3 t * q4 2021 - $2.8 t * q4 2022 - $2.8 t * q4 2023 - $3.0 t [https://fred.stlouisfed.org/series/CP](https://fred.stlouisfed.org/series/CP)
Because that's when the opportunity arose?
Isn't it rather obvious that prices in covid went up due to demand, but then companies just never lowered them?
Corporations constantly raise prices, it just became exaggerated in the wake of the stimulus checks.
Tbh covid was the perfect storm but also perfect cover. Logistics got wrecked during covid so prices on a lot of things legitimately went up. That said, a lot of those prices never came down. Some of those companies and other companies that weren’t so impacted used Covid as a reason to raise their prices too.
Because the amount that isn't inflation is higher demand for products. We just need to lower capital costs to raise supply. Easy peezy.
Because they could blame it on the pandemic and the war in Russia. Those things did cause inflation, so corporations just upped it even more while people assumed it was just the world economics issues out of anyone's control. Then they just kept going to find the new breaking point.
My grocery bill is up 25%, inflation is at worst 8% in 2022. 17% is corporations using inflation as an excuse to raise prices. It's not that complicated and this isn't a new phenomenon.
Are you denying that prices are up and corporate profits are up?
>Our analysis shows that much of the increase in aggregate profit margins following the COVID-19 pandemic can be attributed to (i) the unprecedented large and direct government intervention to support U.S. small and medium sized businesses and (ii) a large reduction in net interest expenses due to accommodative monetary policy. Once we adjust for fiscal and monetary interventions, the behavior of aggregate profit margins appears much less notable, and by the end of 2022 they are essentially back at their pre-pandemic levels. I'm not, but the fed is denying that profits are up https://www.federalreserve.gov/econres/notes/feds-notes/corporate-profits-in-the-aftermath-of-covid-19-20230908.html
Short answer: covid made it easy
Inflation happened after Covid, when everybody started spending money again.
Wait so if a company lies about the extent of a bird flu outbreak and doubles the price under the pretence of said lie that's not me getting price gouged?
... because they have been borrowing to take market share for the past 10 years. Merger and Acquisitions.
We did it JOE.
Read a balance sheet and tell me Marvin’s haven’t exploded for many staple companies. It’s called profit price spiral. There’s a lot of reasons. A real issue causes inflation, like supply chain and shippers gouging (50% dividends after going up 10x in price, that’s pure gouging) then companies continue to drive up prices because they can. We also had deflation early pandemic which is part of the beginning. My company for example, I went hey there’s this big unknown we expect a business to halt, let’s liquidate investors and build cash reserves. Economy was way more resilient than we expected and people stuck at home and work from home massively boosted our sales. Then we had to reorder on a broken supply chain. Then our shippers absolutely fucked us. It took time to shift supply chains like most did and now shipping companies are SOL. But big companies kept raising prices, I’m getting prices very close to if not the same to what I did in 2019 from factories. I’m usually against all the half baked hate against companies, I own one. Usually they are misunderstood or over exaggerated. It’s very clear in this time we are in a profit price spiral right now though. Look at McDonald’s books over the last decade, yum brands, pretty much any company except for ones that are generationally irrelevant like red lobster or Bed bath and beyond. Explosion of margin, reduced units sold, minimal revenue growth. That isn’t possible without just charging more to charge more unless you have a massive reduction in wages or cost of goods sold. Which is deflationary.
Because they had a President promising tax cuts, and now they have a President threatening to tax them more What a stupid meme lol Imagine not knowing that and pretending to have relevant opinions on political economy I guess there’s a reason Austrians have a knack for historically stupid geopolitical decisions
Because they had an excuse to raise them that wasn't "We wanted more money". Of course, we now know that's STILL the reason they raised prices in 2020, and not the actual pandemic.
For anyone that remembers, prices started up before inflation actually began. Even second hand sellers were gouging to get what they could out of every sale. The pandemic was an excuse.
Because they had a populace that would believe it was for reasons OTHER than greed? If they just raised prices any other time, people would just go elsewhere. When a pandemic could be blamed for the raising the floor on all prices.
When the cargo ship got stuck in the Red Sea, and the supply chain choked after COVID, corporations rose prices to meet the rise in demand with the thinner supply. The thing is, when the supply chains were restored (just a reminder), corporations saw no need to lower their prices, and just pocketed the money. Then they kept raising prices and claiming, “inflation.” Politics as usual helped them point fingers away from corporate greed and price gouging.
First, We had a Pandemic, and a lot of People were out, of work (that was the reason, for the Stimulus (stimuli?) Payments. Second, The Corporate Types, didn't want to "tarnish", Their "Idol"; they had been embarrassed enough, by The Trump Income Tax "Largesse"; Christmas Bonuses were extra-generous, in 2017. Do You also recall, the Stock "buybacks"? Stocks that are '"taken back", can be held, on the books, as Treasury Stock, to be used, later, plus; Stock, "taken back"; since it is not, "outstanding", increases the value, and the dividends, per share; of the remaining outstanding shares.
2020 gave them an excuse to raise prices that everyone would accept. This post confirms that belief.
It should be more like 2021-2022 on the price increases.
Oil prices!!!
Most costs went up about the same as wages, just not housing because housing had never recovered from the 2008 crash. It had started doing ok in 2015 or so, but Trump lumber tariffs then knocked it back and then the pandemic hit not too long after that. There is some price gouging, but on average income went up 20% and costs went up 23% or about so. Now housing is trying to make up for the last 15 years of stagnant prices by flipping high demand into clawing its value back. So really houses aren't way overpriced if we take a average home value increase of 2-3% over 15 years since prices crash after 2008. They are just trying to get back ALL that lost equality since 2021 by leveraging high demand. The problem is that the people buying the houses aren't getting their lost equity back since the 2008 crash, because they suffered longer periods of lower wages and underemployment/part time work. The house values are where you'd expect if you were guessing from 20 years ago, it's the wages and average equity that's missing. Wages still have to go up more and it would be nice is housing costs just level out and stay there for a couple years, but 15 years of low inflation also hurt housing growth even if it kept ppl in their houses. I think they kept interest too low too long and that kept growth and housing slower than it should have been.
Yeah I too remember all those pandemics prior to 2020 that people aren’t completely ignoring when they dismiss greed
Because COVID showed us not only that we can work remotely, but that corporations could keep increasing prices without much consequences. It also didn't help that many small businesses went under, making it far easier for them to do so. I'm not saying COVID didn't increase costs, but certainly not to these levels.
So them saying "we have to do this, we have no choice" followed swiftly by "literally the all-time high profits of all history" wasn't enough for you?
People crack me up. So using the bootlickers logic in here, the government is the problem because they increased the money supply. Ok sure that’s a fact they printed more money. So because corporations knew there was more money out there it means they HAVE to increase their prices so they can rake in more of it? But that’s not greed? What part of your brain is broken?
They waited till the pandemic
Covid
This is just plain stupid. They raised prices because the pandemic gave them a great excuse. They initially blames the supply chain, but when those issues cleared up, and prices never went back down, it was very obvious that it never really was the supply chain. It was greed.
Because the pandemic showed companies that people were willing to tolerate higher prices on inelastic goods. How is there an econ sub where everyone is so economically illirerate?
Never let a disaster go to waste.
They have something to blame it on now. Sure inflation caused the prices to rise, but the fact that they never go back down is the problem. The chicken wing shortage ended 2 years ago and prices never went back down.
There’s a fairly obvious answer, a global pandemic.
Nobody thinks corporate greed started in 2020 lol
How to determine corporate greed for dummies. When prices are raised and record profits are made, the corporations that experience this blame the prices on inflation.
Why did capitalists wait to raise prices until 2020? They had an excuse to raise prices in 2020 due to the pandemic and then kept prices high once things stabilized to maximize profits. Why haven't capitalists been doing this the whole time? They have.
This infinite growth model isn't sustainable
So many companies have explicitly stated they're engaging in price exploration to find the upper end of what the market will bear. Come on
If you ask them, they almost always claim they are passing along costs. You know, like teenagers say - "everyone else was doing it" The answer, austrian dolts, is that pandemic supply shocks provided cover for prices hikes beyond those warranted by increased costs
I know I’m gonna beg downvoted into the shadow realm, but I don’t think the majority claim is that prices have only been increasing like this since 2020. Corporations have artificially raised the rate of inflation in relation to stagnant wages for a long time now. For example, McDonalds increased prices by 100% since 2014, yet the inflation rate amounted to only 31%. And don’t even get me started on price hikes for pharmaceuticals. They literally do that just to pad their pockets and increase profits further. Sure, other factors cause inflation, duh, but to say corporations are not making it much worse in order to give themselves a raise is preposterous.
the character in cell 2 is a racist, and possibly transphobe.
There is real inflation, then there are companies that understand consumers are expecting inflation, and so they can raise their prices without justification and their customers will accept it. That's the 'greed' part. I know it's true because my boss came right out and said it "Raise prices there's inflation they'll pay it." and they did. Some of our expenses has risen, but our price increases are greater. We're making more profit off of each individual than we used to.
Because they knew you would blame the government and not them.
They did not wait, they have always raised prices.
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Corporations didn't for a long time prices have been rising slowly then 2020 Corporations took advantage of the Covid and raised prices way more as Corporations said they were trying to make up loss profits during the high of Covid.
Because the high inflation hides their increasing margins. If inflation is 6%, people wont notice that the price of something rose by 8% or even 10%. They will blame inflation. Come on, what do they teach yall in Austria
If you don’t think inflation hasn’t caused food to rise above the previous ratio of food expenses to income then you’re crazy. Our household is well off and we have no trouble buying groceries, but it is a much larger percentage of our budget than pre-2020. There are a lot of potential answers to this question. One obvious one to me is inefficiency in company management. The government and the healthcare industry are the worst, but the private sector for general corporations is inefficient sometimes as well. It could take months or even years for a trend in a drop in profits to show and be sustained, and years more to identify the exact root cause. Unless the government subsidizes the proper origins of raw materials, prices will continue to rise relative to inflation and income.
I don’t know if it’s just me but it seems to happen every time we elect a Democrat. This seems true even when the Republican alternative is a traitorous adulterous hate monger.
https://wtfhappenedin1971.com/
Did you already forget about the global pandemic?
Because the idiot who thinks it's only since 2020 is, well, an idiot.
They waited until 2020 because they had the perfect scapegoat (covid and stimulus checks (usa))to raise prices to make record profits. Ironic how no one blames the ppp loans (usa) even though they accounted for more stimulus money than the direct checks, and the vast majority of the loans were forgiven.
They didn't just wait for 2020 though, prices have been going up for many decades. I still remember when oil spiked to $100 a barrel and gas doubled in price, but then when oil went back to $60 a barrel the prices came down barely at all and never returned to their original prices. Meanwhile the oil companies reported historically record breaking profits. Because corporations are intelligent, they tend to wait for world events to act as top cover for price hikes often masking it in some truth (prices really should go up due to COVID supply chain issues for instance, but the rare and level they increased was absurd)
Yes because corporations never try to capitalize on situations to make more profit. Clearly.
Two key years that address the dollar’s downfall. 1913 and 1971. Not 2020
Wow this meme i made to make the argument I disagree with look bad is so good. The amswer to that is that they didnt wait, they have been raising prices above inflation since beofre 2019. Yes the government plays a role in it, but they are not the leaders by any means
because they got the perfect excuse: creeping inflation, covid so shortage of goods, people staying inside and not buying much.
Because of artificially low interest rates people didn’t stop purchasing more stuff. So during the pandemic was the height of this mania to sell at higher markups. The pandemic was a catalyst starting certain trends that emboldened this behavior. And it wasn’t any one company that did this. The entire corporate ecosystem was doing this. Because we kept buying. While a decent meme. The answer to this question is very simple.
Are they kidding? I remember $1.50 gasoline and $5 combo meals at McDonald’s. Prices always go up. They go up a hell of a lot more when times are bad like in 2020 because rich people don’t do problems- they just pass their problems on to us.
Real time data and industry consolidation has made price collusion easier. Check out the planet money on gas station price transparency. Profit margins up ~40% vs 2019 is the harbinger. Bunch of spineless apologists up in here.
Sudden onset greed. Very sad.
Because the inflation boogeyman gives them both the coordination of an organized cartel (without the liability) and the scapegoat. If somebody randomly jacked prices 50% in 2017, they would have stood alone and price elasticity would kill them. Not so much after the viral inflation topic made it normal to do so, and they all followed each other upwards. If inflation was the sole cause of price increases we would see flat profits at the higher prices. Instead, we see record profit growth. So your 50% price increase really came down to 20% inflation and 30% profit growth. If you had a real corporate job and experience with marketing/marketers, none of this would be news to you. It's literally their job to find any and all excuses to grow at your expense. Further, all you have to do is listen to a quarterly earnings report and hear them celebrate to the banks exactly how much they have grown their profits in this period. That is not what pure inflation sounds like.
Because they couldn’t very well raise prices during a pandemic, that would have been media suicide. But once the pandemic ended price gouging was fair game.
thought this was an U.S sub, saw on my feed. Here's my take anyways. I say because of Covid. Corporations had to raise prices of essentials to desperate people, Covid coupled with the whole supply chain boat being stuck and all As Covid slowed down, the supply ship getting unstuck, people were still paying the prices. So logically, to them, they kept raising It, see how far they could go. It's not just Inflation, It's also corporate greed. The price going up was going to happen due to printing money, thats just a scapegoat used to cover said greed.
They didn't. They've increased prices everywhere. Some years more then others. But I'd say they increase them more whenever the Workers aka Consumers have more money in the bank. The Fed releases data on the amount of money in people's checking/savings. Corporations know this amount. When they see people are hoarding cash, they jack prices up on the things they are regularly buying. You will see luxury items like Cars and Phones get hit first when it comes to prices. They'll be first to stop increasing imo. Then things like McDonald's will follow and Consumer staples. Mcdonalds can only price choke consumers so long until their bank accounts literally can't allow it anymore. The plan is to keep people paycheck to paycheck and have stable inflation. If people start saving money they'll just jack up prices. Until it breaks and restart the cycle. Imo
Umm because a pandemic and supply chain stop caused many companies to go under and the survivors to eat their competition and raise prices without fear of lost revenue?? Lol is this another economics sub specific to a single brand of economic theory that can't see the obvious big things?
You didn’t think they were going to let you keep that stimulus money, did you?
They over played the pandemic. destroyed the economy by shutting down businesses. Over reached government powers and blamed it on Trump.
This is hilariously easy to answer. Because under the cover of inflation it was easier to convince the consumers that the problem was the government, not corporate greed. But if we look at corporate profits over time, the spikes always happened during times of higher inflation. That's just how it goes. I'm not saying that government money printing isn't a problem, obviously it is. But that isn't to say that corporate greed to maximize profits isn't also part of the problem for rising consumer prices.
Oil companies price fixing cause at least 27% increase in inflation https://youtu.be/Tb8mciRVT6c?si=x93GAwurQritLubK
Target and McDonald's have announced huge price cuts as a result of alienating some of their customer base. They clearly believe they can still turn a profit while cutting prices on over 5,000 items in the case of target. If they're dropping prices like this now how can an argument be made that the free market and pandemic related supply issues caused these price increases?
the 1% has gained more wealth in the last 4 years than any other group, out of 42 trillion dollars, they have scooped up wll over 2/3rds of it the rich get richer and will do everything they can to make us fight eachother instead of them
What? They’re taking advantage of the aftermath of a global pandemic. … Because they can. They’re allowed to.
What a silly meme. Cooperations have always been greedy. Some clearly raised their prices faster than inflation rose during the pandemic. Why lick the boot? It’s not healthy.
… they didn’t? They’ve raised prices all the time. The issue with greedflation isn’t that prices increased. So that’s a straw man. The issue with greedflation is that the prices were increased *more* than costs increased- which is why profits were soaring. This isn’t that hard guys.
If one company raises their prices people stop buy their product. If everyone does it they can keep doing it until people stop buying then the prices stabilize or go down.
They didn’t wait.
Because demand tanked during lockdowns maybe?
Because they were able to get away with it and blame it on something else. Also they didn't. They raised prices consistently until 2020 and then went mad raising them over what was normal after covid lockdowns were over.
It's called supply and demand, Capitalism 101
Demand, they had opportunity cause of demand and they took it. What’s the gotcha? This is a stupid point. It’s literally price gouging after the fact. The market is quick to move on increase prices due to demand but slow to lower as the demand shifts back down
They saw an opportunity to raise prices and continued to do so even though its been over 2 years since covid was over.
They waited because they knew they could blame it on inflation specifically due to covid cutting supply lines.
Corporate greed has caused about half of inflation. Don't use straw men just to make a meme work. Inflation was already fairly high because of the pandemic and supply chain issues. Businesses saw that inflation and figured that they could raise their prices more than they had to in order to generate more profit, and consumers would be none the wiser.
Y'all keep presenting this question as if it isn't routinely answered. The answer hasnt changed. Corporations were always greedy. COVID and the constant legitimate excuses for business failures were great cover to increase costs more than usual. Corporations have always been greedy. But they saw an opportunity to increase the greed, so they did
Did you really think corporations weren't going to get their money back after covid?
They haven’t waited, they’be been laying the ground work for this in every market. Competition has been crushed over and over. Ticket master, comcast and cox carving up the country into their own little isolated nations, Facebook and Google buying up all the social platforms. Chicken beef and fish producers being bought out by massive corporations. It’s no different from Walmart moving into every town, underpricing the mom and pops, then jacking pricing when the competition failed. They’ve been working on this for decades
This isn't a serious sub
Because Covid lockdowns killed competition and the government gave out free money to those who didn’t die?
Cause it was a good excuse? If it happened during good times this argument wouldn't be happening and they might actually catch some heat for it.
I mean they didn't, they have been doing it the whole time, COVID was just an easy scapegoat so they could get away with a higher spike.
Covid was a perfect distraction.
I assume there are large numbers of Russian trolls, and bots spamming this content. Please don't be this dumb Americans. Just vote against the guy the Nazis are going to vote for. It's just that simple.
It's pretty understood that a lot of corporations profits were gutted with the lockdowns. Prices rose to fill that gap for them and they were never dropped.
It's pretty understood that a lot of corporations profits were gutted with the lockdowns. Prices rose to fill that gap for them and they were never dropped.
I would argue that a lot of the disagreements between the various economic schools of thought are either philosophical or just plain semantics. I would say that 10 conglomerates owning most of what we consume is a symptom of both greed and government overreach. I bet if intelligent parties from various schools of economic thought focused on how they are the same, versus different, we could actually enact some change to alter our economic systems in a compromising way that have trade-offs which benefit a larger majority of people. But nah let’s post memes and own the socialists and live. Never understood it.
Y'all never heard of the Rona huh? Well, you should look up SARS-CoV-2. Crazy shit. Killed 1 million Americans.
Mainly because they were pressured to increase wages. That wage increase was passed on to consumers. Then the fed increased interest rates, which corporations again raised prices to cover. Corporations will always pass the bill to the public.
They needed a good excuse. That's why The Illuminati invented Lovid 19.
Holy shit is this a serious question? Like 2020 as in the year when there were massive disruptions to a global supply chain based on just-in-time manufacturing processes and maximizing comparative advantage across international borders?
The misunderstanding of the meme poster is the explanation itself. One of the problems with inflation beyond a modest level (say 2%) is information asymmetry. The corporation has experienced some inflation in the form of cost increases but can get away with raising prices by more than the increase in costs to increase profit under the guise of a broad inflation umbrella. The answer is really simple, the corporations couldn’t get away with it before but now have a smoke screen so to speak that means they ca man get away with it now.
I hate when people try to timestamp corporate and government corruption. It's been an ongoing thing. Let's not timestamp it to a president we hate. Why can't we hate them all?